Friday, June 13, 2014

When to Tell Your Affiliate Partner to Hit the Road

Breaking Up is Hard To Do


It is easy to recognize that in today’s interconnected world of fast-paced travelers, having a solid and well-performing affiliate base is key to being able to service your customers wherever they are traveling. There is an enormous amount of trust you must put in your affiliates to maintain your duty of care and uphold your company’s standards.

­­And don’t forget the “other” side of affiliate business; you have to put your trust in them to compensate you for the work that you farm in on behalf of other ground transportation providers, as well.

As rewarding as it can be to grow both your farm-in and farm-out affiliate business, sometimes an affiliate just isn’t the right fit for your ground transportation business. For affiliate partnerships to be profitable, you need to know which affiliates you should spend your time with, and which ones you should let go. In some cases, it is best to cut an affiliate loose so you can devote that energy and time to your most lucrative partnerships.

The 80/20 Rule
Known as the Pareto principle—named after the economist who developed what is formally called the law of maldistribution—the 80/20 rule recognizes that in any group, 80 percent of the results come from 20 percent of the participants. In your affiliate business, that means 20 percent of your affiliates account for 80 percent of your affiliate sales, while another 20 percent account for 80 percent of your headaches.

The secret to success in affiliate revenue is for you to focus on that profitable 20 percent, while avoiding the temptation to become consumed by the demands of the costly few. To accomplish this you should certainly listen to your unhappy affiliates so you can right wrongs wherever possible. However, for every minute you spend addressing affiliate-related issues, spend four minutes nurturing your most content and profitable affiliates; if you focus on problems more than nurturing affiliates who are offering you solutions, your time and energy will be devoted to a very unbalanced, doom-and-gloom sector, which is not healthy for growing your affiliate business.

Tell-Tale Signs You Should End An Affiliate Partnership:
Sometimes, no matter what you do, you may be faced with the decision to either maintain or sever an affiliate partnership. Here are some tell-tale signs that it may be best to cut ties:

 1. When they start telling you how to run your business. This is not to say that your farm-in affiliate should not be able to articulate that they require you to uphold their level of customer service. However, if they take it a step further, and start making unreasonable demands about how you should run your business, then it is obvious that they do not believe in your essential worth as a partner. Simply put, that type is not a good fit as an affiliate. On the other hand, if your farm-out affiliates push back against your (reasonable) requirements of customer service, then maybe they are not a good fit either.

2. When you allow your fear of lost income to compromise your integrity. If you find yourself saying “yes” to your affiliates' demands, regardless of your feelings of dread, then this is a sure sign you are agreeing to work with them solely for the money. Of course, money is important and affiliates do generate income, but if you feel that your integrity is compromised because of something they strong-armed you into doing, then it’s definitely time to part ways.

3. When you are asked to disregard your core values. When a farm-in affiliate tells you that you have to do something you know is wrong, get out immediately. Your core values are what your brand represents.  Allowing that brand to be jeopardized by diluting your core values is basically signing your business' own death warrant.

4. When they become a “time suck.” Most everyone will eventually have one of these types of affiliates—the ones that will endlessly take advantage of your time. Asking for an occasional favor is fine, but when those favors eat into billable hours and revenue, it can become problematic. A partnership is a two-way street, and if your affiliates don’t show respect for your time, then they most likely don’t respect your partnership either.

Once you’ve determined that an affiliate partnership is not in your business' best interest, what
is the best way to end things amicably?

A good rule of thumb for ending any affiliate partnership is to make it feel like a mutual decision by using language like “not a good fit,” even when it is a clear understatement. If possible, make a suggestion or recommendation for another possible replacement to your affiliation. Although abruptly cutting off this partnership may be tempting, try to remain neutral and professional; taking the high road is always a business best-practice. Likewise, taking blame for the bad affiliation may feel gracious, and an easy way out, but it will fuel the affiliate's sense of being wronged, and will likely create industry gossip or fodder that is not in your best interest.

Best Practices for Creating Healthy Affiliate Partnerships
Establish good rapport and clarify your partnership standards. You need to ensure that you have compatible duty of care requirements and standards. In this case, opposites do not attract. Making sure that you have similar core values helps to ensure that both your standards are upheld and that you can uphold their standards easily, without compromising your brand or integrity.

Make sure you have an affiliate package (both farm-in and farm-out) that clearly outlines and records vital information relating to both sides of the partnership. Such a package would outline fleet sizes, booking options, signage requirements and most importantly, payment requirements.

Monitor the quality of the partnership often, and on farm-outs, make timely payments. There is nothing that will sour good rapport more than slow—or no—payments for work that was done on your behalf. Likewise, if you are finding that payments from your farm-ins are slow or not forthcoming on a regular basis, it may be time to reevaluate the partnership.

For farm-in affiliate partners, ask for their business! As the saying goes: out of sight, out of mind. Take time to remind your affiliate partners of the benefits of farming their business to you when they need it in your area, with a nice email newsletter on a quarterly basis.

As with all partnerships, communication is key. If you suspect something is not working the way it should, pick up the phone and talk about your concerns.

In the traditional sales model, the key to achieving a successful customer relationship is broken down into five steps:

1. Identify potential prospects.
2. Attract prospects.
3. Close the sale.
4.  Upsell them to more of your services and engage them in your brand.
5. Grow and nurture the account.

The same approach can be applied to achieving a successful (and profitable) affiliate relationship:

1. Identify potential affiliate partner prospects for farm-in work.
2. Attract complementary affiliate prospects for farm-out work.
3. Agree/finalize affiliate paperwork.
4. Engage and educate them about your affiliate location and all the services you offer.
5. Grow and nurture the affiliate relationship through phone calls, email and trade show
        networking opportunities.

It is always a good practice to review your affiliate relationships once a year. It is a great reminder to reach out to your affiliate base and remind them of your availability, as well as to evaluate if the partnership is working. If you do wind up parting ways, make sure you keep track of the reasons so as not to repeat history with future affiliates.

Saying goodbye to relationships, personal or business, is never easy. But having the best tools and practices possible to guide you through developing, maintaining, growing and sometimes ending affiliate relationships is key to building a successful affiliate component to your ground transportation business.

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Written by Dawn Sheldon
Assistant Editor
dawn@limodigest.com

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